Minn. schools get $55M tech windfall

From eSchool News staff and wire service reports

February 1st, 2006

Thanks to a court settlement with Microsoft Corp., Minnesota schools will share $55 million they can use to buy new computers and software, Gov. Tim Pawlenty announced on Jan. 30. And if Minnesota is any indication, schools in as many as 14 other states soon could have similar windfalls of their own.

While Minnesota schools have known since 2004 that they had some money coming their way, the final amount was up in the air until recently. Pawlenty said that the technology vouchers have just started going out.

“With the fast-paced changes in the field of technology, it is often difficult for schools to keep pace,” he said. “This money will allow them to update and–in many cases–expand their technology, which in turn will help students learn and achieve at higher levels.”

Pawlenty’s announcement is among the first from a string of states awarded substantial settlements as the result of a highly publicized class-action lawsuit, in which U.S. customers and businesses claimed Microsoft was violating antitrust laws by overcharging for its Windows operating system and its Excel and Word software programs. The company had denied the allegations, saying the prices on its products had dropped. Montana also reportedly has distributed settlement money to schools, though those figures were not available at press time.

In total, Microsoft reached similar agreements with consumers in 15 states–Arizona, California, Florida, Kansas, Massachusetts, Minnesota, Montana, Nebraska, New Mexico, North Carolina, North Dakota, South Dakota, Tennessee, Vermont, and West Virginia–as well as the District of Columbia.

As part of these agreements, customers were to receive vouchers from the company that would allow them to purchase new software and hardware products of their choice. Though each state has a slightly different agreement, the consensus was that a large portion of any unclaimed vouchers–as much as two-thirds in some places–would be distributed to schools to upgrade aging technology components. The rest would be returned to Microsoft.

The announcement in Minnesota is significant, because it provides the first indication of just how much money schools in these states are likely to see as a result of the settlements.

In total, Minnesota consumers received $174.5 million worth of vouchers from the company, $110 million of which went unclaimed. Under the state’s settlement agreement, half the value of all unclaimed vouchers–totaling $55.2 million–is to be distributed to schools.

If the apparent lackluster response from consumers holds true in other states, schools in places such as California–where settlement agreements exceeded $1 billion–could be in line for a major financial windfall.

In Minnesota, the amount each school gets depends on the concentration of poverty in its district. Some will receive only a few thousand dollars, while others, like Minneapolis and St. Paul, are in line for more than $6 million each. To get the money, each district in the state was asked to submit a blueprint for how it planned to use the funds. Districts have until 2012 to use the vouchers.

“It’s definitely going to give us a much-needed shot in the arm, there’s no question about that,” said Mary Mehsikomer, a senior planner with the Minnesota Department of Education, in an interview with eSchool News about Pawlenty’s announcement.

Not only will the funds help schools upgrade aging technology throughout the state, Mehsikomer said; they also should help soften the impact of recent cuts to federal grant initiatives, such as the Enhancing Education Through Technology (EETT) block-grant program, which Congress cut by 45 percent in its 2006 budget.

In 2005, Minnesota received $3.5 million as a result of the EETT program. Though Mehsikomer could not say how much money the state would receive in 2006, she said the budget cuts are a good indication that Minnesota’s share will be significantly less this year.

More than offsetting the pain of federal budget cuts, she said, the majority of the funds will be used to bolster and extend existing ed-tech programs–not, as EETT is intended, to start new ones.

“We don’t use a lot of EETT funds for equipment,” she explained, adding that the way the Microsoft settlement is set up, schools are required to use the funds to replace or upgrade existing technology, such as hardware, software, and infrastructure.

Mehsikomer said schools likely will use the money to purchase a variety of hardware and software products, including instructional software titles, productivity software, and infrastructure equipment.

At the elementary school where Pawlenty detailed the payout, Principal Patricia Steingruebl was ecstatic to learn her school would be getting $55,000. She said the school now spends about $2,000 a year on new technology.

“We don’t plan to spend that all at once,” Steingruebl said. One priority, she said, will be new software to help teach reading.

The vouchers automatically will go to districts, which will be able to shop from a list of 1,500 approved hardware and software products, said Richard Hagstrom, an attorney with a Minneapolis law firm involved in the case. He said the offerings go beyond Microsoft products.

Mehsikomer said the claims administrator already informed all but 46 districts in the state regarding the amount of money each school will receive and that the remaining 46 districts should expect to get word soon.

Because the settlement represents more or less a one-time investment for schools, Mehsikomer stressed that schools “need to be very careful” in how they choose to use these funds.

But, she added, if schools use the money responsibly, the upside potential for technology in Minnesota’s schools will be huge.